How to Choose a Tax Preparation Course

HOW TO CHOOSE A TAX COURSE

Course for tax preparation…

So, you want to learn how to prepare taxes for personal and or business purposes. Online courses are the most convenient, affordable, and quick to complete, as they enable individuals to study at home.

If you are seeking credentials as a tax preparer, or tax resolution specialist, first establish the level of IRS credentials you desire. Depending on your tax education preparation, you have the opportunity of doing an Internal Revenue Service competency exam.

A student may choose from seminars/workshops, certificate, or preparatory programs, in addition to individual courses. Tax preparation programs are provided by community colleges and also 4-year colleges and universities. Although these tax education programs don’t usually result in a degree, most award undergraduate and graduate “certificates.”

Online opportunities range from IRS webinars that are free to certificates, diplomas, bachelor’s degree programs, and post-graduate studies in taxation and accounting at universities.

The following table is an example of schools that offer tax preparation programs, and includes the course fees:

Tax Prep Program Overview

Image via NCES College Navigator

Tax Return Preparer Qualifications and Credentials

Keep in Mind

When considering a tax course, you need first to understand who the IRS authorizes to become tax preparers. There are different categories of tax professionals who will have varying levels of education, expertise, and skills. The Internal Revenue Service must authorize any individual who wants to prepare federal tax returns for other people. You can get IRS approval by applying for the Preparer Tax Identification Number (PTIN) on the IRS website.

Representation Rights

The most important thing to have in mind, pertaining to the different types of practitioners is “representation rights.” The information below provides guidance on each qualification and credential:

Unlimited Representation Rights

Attorneys, certified public accountants, and enrolled agents have the IRS status of unlimited representation rights. Tax professionals who have these credentials may represent their clients on any IRS matters, including audits, appeals, and payment/collection issues.

Attorneys

Tax attorneys must have earned a law degree, passed the bar exam, and be licensed by the District of Columbia or state bar, and their designees, and state courts. Attorneys should have professional character standards and on-going continuing education. While attorneys generally offer a range of services, some attorneys specialize in tax planning and preparation.

Certified Public Accountants

CPA’s are licensed by the District of Columbia, U.S.A territories, and state boards accountancy. CPA’s must have already passed the Uniform CPA Examination and also completed accounting studies at a university or college. CPA’s should have met good character and experience requirements established by the respective accountancy board. In addition, in order to maintain an active CPA license, CPA’s must complete specified levels of continuing education and comply with ethical requirements. While most CPA’s offer a range of accounting services, there are CPA’s who specialize in planning and preparation.

Tax Preparer

Enrolled agents are a type of tax preparer, who are licensed by the Internal Revenue Service. They must pass the Special Enrollment Examination, which is a three-part comprehensive exam, that expects them to demonstrate proficiency in representation, federal tax planning, and individual and business tax education. Every three years, enrolled agents are also required to complete 72 hours of continuing education.

Tax preparers who do not have one of the credentials indicated above have limited practice rights. They can only represent clients whose tax returns they prepared and signed. However, they can only do so before customer service representatives, revenue agents, and similar IRS employees, which includes the Taxpayer Advocate Service.

This means that they cannot represent a client whose tax return they didn’t prepare. Besides, even if they prepared a tax return, they cannot represent a client in a matter concerning appeals or collection issues.

This category of tax preparers include:

This a voluntary program that recognizes tax preparers who are neither enrolled agents, certified public accountants, nor attorneys. The program was designed to encourage filing season readiness and tax education. These volunteers are expected to offer their tax preparation services for free. The IRS gives an Annual Filing Season Program Record of Completion to tax return preparers who achieve 18 hours of education hours and pass a six-hour federal tax law test. The tax return preparer preparing for a specific tax year must renew their PTIN.

Please note, after 31^st December 2015, only Annual Filing Season Program participants are given limited practice rights.

PTIN Holders

Beginning from the 1^st of January 2016, other tax preparers who are authorized to prepare tax returns are those who:

1. Have an active aka current preparer tax identification number (PTIN)
2. Don’t have professional credentials
3. Don’t participate in the Annual Filing Season Program
4. Don’t have the authority to represent clients to the IRS. This excludes any returns prepared and filed before 31^st December 2015

Tax Preparation Program Selection Criteria

Now that you are aware of the IRS credential categories, let us discuss online tax education opportunities. At the most basic level, you should have the following criteria in mind when looking for a tax preparation program.

Always select a program that:

1. Teaches students to prepare their personal taxes and other people’s taxes. The school should offer sufficient preparation for the basic IRS exam
2. Is flexible and has a duration ranging from one individual course and or a full semester and or beyond 12 months. Short programs will be adequate for training in personal tax preparation, while a more in-depth program will be suitable for one wishing to get employment or business opportunities as a tax preparer. For instance, if you are not interested in a long-drawn course, sign up for a seminar program (workshop) that’ll allow you to study tax preparation over 1-2 full days
3. Offers hands-on experience, e.g., supervised tax preparation internships, community programs, etc.

Tax preparation programs/courses are generally categorized as follows:

Seminars

A seminar, which is also referred to as a workshop, is usually a short and focused program in tax preparation, that is designed to educate people in basic and advanced tax knowledge. Basic seminars focus mostly on individual state and federal returns, while advanced workshops focus on complex issues because they are typically designed for people who have tax preparation experience

Basic Certificate Course

A basic certificate course in tax preparation curriculum should teach you how to complete state and federal returns for individuals. These tax programs usually have as few as three classes or 15 credit hours of coursework. A good certificate program will prepare you sufficiently to take the basic volunteer training IRS certification exam.

Advanced Certificate Course

An advanced certificate moves one beyond preparing individual tax returns in order to focus on complex topics, for example, taxes for farms, corporations, and small businesses. Upon completion of this tax preparation course, a student will be qualified to take the advanced IRS certification examination. Please note, preparatory classes might be excluded from the standard curriculum, and you might need prerequisite classes.

Simply put, in the United States, tax preparation programs are available as seminars or certificate programs. Basic certificate programs focus on personal tax returns, while advanced ones cover areas such as accounting, business tax forms, and payroll taxes.

A good tax preparation program, starting from a basic certificate and onwards, should include the following courses.

Included course checklist

CFP exam preparation

This course prepares a student to take the Certified Financial Planner (CFP) certificate exam. This professional designation demonstrates tax preparation skills to potential clients

Estate planning

The course covers bequests, gifts, and non-tax issues, for instance, wills, trusts, powers of attorney, and probate procedures. Reducing state and federal tax liabilities during wealth transfer is an essential part of an online estate planning course. This type of course prepares you for the situations that involve legacy wealth management.

Financial regulations and ethics

This course teaches ethical considerations when filing taxes and when making financial decisions. Students discuss social responsibility issues of income tax preparation and also existing regulations

Introductory tax planning

The course provides a student with a comprehensive overview of the income tax planning process. The module examines various methods that one can use to gather, process, and analyze essential financial data so as to develop an efficient personal financial plan. Students are also taught how to monitor and periodically review and update their plans

Investing and taxes

In this course, a student is equipped with the tools to help clients maintain financially sound portfolios by exploring income taxes connected to investing in the capital market. Most courses also look into the possible returns and risks of stocks, futures, bonds, options, and the tax liabilities they can incur

Retirement and benefit planning

In this course, participants discover how to plan, monitor, and execute personal and business-subsidized retirement plans, for example, nonqualified and qualified retirement plans, government plans, and individual retirement accounts. Topics such as Medicare, health insurance and Social Security are also covered

Risk management

The course investigates the different facets of medical, disability, and life insurance and how they are used during tax preparation and financial planning. Other topics covered are; health, auto and homeowner’s insurance

Small business and self-employment tax returns

During this module, a participant learns how to navigate and deal with the regulations, unique tax codes and unusual expenses surrounding the tax returns of the self-employed and small businesses.

State and federal taxation

Students learn the essential facets of state and federal taxation as pertains to personal, business, and foreign income. They explore the ramifications of the sales of property, annuities, investments, and the advantages of charitable giving. This module also discusses the responsibility of correct tax estimation, with regards to self-employment

Certificate Level Tax Preparation Training

A taxation certificate program is useful for both tax professionals and novices who want to learn to file their taxes.  Tax professionals enroll in certificate programs to update and expand their knowledge, and therefore boost their careers.

Taxation certificate programs have a few courses and are commonly offered online. Students who study income tax preparation through either tax preparation or financial planning programs usually receive certificates. These certification programs require a minimum of ten weeks, and up to a year to complete.

Course Includes

Income tax preparation coursework requires basic math skills and tax code memorization abilities. This is due to the significant amount of time spent on learning federal and state codes, as they pertain to personal, business, and international taxation.

After the course, a student can take a three-part exam to become an IRS certified enrolled agent. A student can represent taxpayers with that credential. In addition to becoming an enrolled agent, a student can also apply to the Certified Financial Planner Board of Standards to be designated and recognized as a Certified Financial Planner (CFP).

Most programs give their tests online, however, some schools may only offer on-campus testing. Topics covered may include; property taxation, tax planning, corporate taxation, computerized bookkeeping, dispute resolution and tax laws.

Certificate Level Overview and Requirements

An online undergraduate certificate program in taxation will sufficiently prepare a student to advance their careers with government revenue departments, CPA firms, and corporate tax departments. Topics include business tax planning, state, and local tax policies, and tax law interpretation. Students learn accounting and finance fundamentals, business, as well as how to apply the theories. Some certificate programs may require relevant work experience.

Certificate programs typically consist of 12-15 credit hours that can be completed within a year. To enroll, students need a high school diploma, GED certificate, or equivalent. Courses can be completed either online or on-campus, with special workshops on specific tax issues. The courses offered in a good certificate program should count towards the education requirement needed to take the Uniform CPA exam.

Coursework includes case studies, readings, and discussions. Specialized undergraduate certificates can offer courses in marketing, taxation, financing, and corporate or international tax laws. Enrolling in some specialized undergraduate certificates may require skill aptitude tests. Exams may be taken on-campus, online, or at local libraries.

Certificate programs may include courses on:

Property taxation

This course defines and reviews capital assets, statute of limitations, personal property taxes, and at-risk rules. Students also learn basic administrative processes involving audits and record retention.

Researching Tax Laws

Certificate students examine the sources of tax law and how to interpret tax law. Research is conducted using tax law books that are available in print and electronically.

Please note, a “graduate certificate” is designed for those with bachelor’s degrees in accounting, business or a related field. A graduate certificate student will generally have a few years of tax preparation experience. For this reason, to gain admittance to a graduate certificate program, potential students are also required to submit GRE scores. A graduate certificate in taxation may lead to a career in the fields of auditing and accounting. Economic growth and an increase in SME’s has increased demand for qualified tax professionals who have both graduate certificates and unlimited representation IRS credentials.

On attaining graduate-level certification for taxation, an individual will be able to able to pursue a master’s, doctoral, or professional degree.

Niche and Advanced Training for Tax Practitioners

Different levels of training are available for those who wish to advance beyond their tax preparation beginner classes, so as to become tax experts. Beyond an ordinary ten-week tax preparation course, those that want to be experts should consider degree programs that include taxation courses.

There are numerous online courses available for individuals and SME organizations that need information on how to prepare their own taxes. Individuals who want to venture into the tax preparation field as a career, should look into the undergraduate and graduate level accounting programs. At advanced levels, taxation courses are usually integrated into programs such as accounting, auditing, and economics.

The Internal Revenue Service and professional associations, for example, the National Association of Tax Professionals (NATP), provide different types of online education. The IRS offers an interactive tax assistant on their website, in addition to a video portal and periodic free webinars for tax practitioners. On the other hand, the NATP website provides self-study courses, work-shops, webinars and exam reviews. The American Institute of Certified Public Accountants (AICPA) also offers courses through its online On-Demand program.

Note:

The basic, intermediate and advanced courses offered on these platforms cover topics such as; gifts and trusts, business partnerships, corporation formation, retirement plans, and estate tax issues.

Commercial tax preparation organizations like Jackson Hewitt provide free preparation courses, which may also provide college credits. Students with two years’ experience of tax preparation or who complete Jackson Hewitt’s basic and intermediate tax preparation course, may take advanced courses on itemized deductions, traditional and Roth IRS’s, and self-employment. Advanced courses may be eligible to receive continuing professional education (CPE) credit.

Niche and Advanced Tax Program Description

In most schools, a student enrolled in an advanced taxation program can complete all the requirements virtually. Schools create online classrooms where students can access assignments, lectures, and reading materials 24/7. Chat rooms and discussion boards, web conferencing, and email are used for class interaction.

In a formal college program, and especially advanced programs, the following topics may be covered:

• Auditing
• Business law
• Estate and gift taxation
• International taxation
• Tax planning
• Tax research
• Taxation of businesses
• Taxation of individuals

Tax Degree Programs Overview

Generally speaking, taxation courses are usually offered within accounting degree programs at accredited universities and colleges. However, some universities offer online and on-campus individual continuing education courses. According to the National Center for Education Statistics (NCES), there are approximately 100 private and public institutions which offer certificate and or degree taxation programs. Some distance learning taxation programs lead to advanced degrees, for instance, a Master of Science in Taxation.

Admissions requirements for advanced degree programs vary but include a bachelor’s degree, GMAT, a resume, and references. A Master’s degree in taxation prepares a student for an independent tax career or a career in corporate or government.

Taxation concepts taught in advanced programs include:

• Business taxes
• Cost accounting
• Financial reporting
• Income deductions and credits
• International tax policy
• Public resources and expenditures

An advanced taxation course includes:

Federal Income Taxation

This course identifies, at an advanced level, common problems that taxpayers have in understanding the tax system. To determine an accurate gross taxable income, students study exemptions, deductions, and credits. This taxation course equips a student to identify the correct means for identifying taxable income and the rules that determine an individual’s gross income

International Taxation Principles

This is an advanced taxation course that examines how people conduct international business transactions. It covers rules pertaining to non-residents and residents. Topics of discussion include principles and investment strategies for deals done outside the United States. This class looks at international taxation limitations and procedures

State and Local Taxation

This course talks on tax law and the right of states to impose taxes. Students study how property and sales tax are used to accomplish government purposes. Students also learn how local and state taxes are applied and enforced. They also learn legal tax constraints and how taxes are generated. This area of study is also covered at the certificate level, albeit briefly

Tax Policy in Public Finance

This advanced course provides an in-depth discussion of taxation policies, principles, and alternative taxation systems. Students become familiar with the theoretical and practical application of enforcing tax systems. On completion of the course, a student will be able to organize finances to pay for taxes – whether taken out separately or automatically – for both businesses and individual taxpayers

Finally…

The tax preparation field requires individuals who have high ethical standards and are committed to fulfilling their client’s needs while obeying the law. A tax preparer must, at the very least, have a preparer tax identification number (PTIN) from the IRS. Tax professionals should also be excellent and clear communicators because they are required to explain tax requirements and regulations to their clients. They are also expected to be highly organized, thorough, and have a precise and analytical approach to documentation.

To verify return preparer credentials, the IRS has a public directory. The comprehensive database lists the city, state, zip code, and name of enrolled actuaries, attorneys, CPAs,

enrolled agents, and enrolled retirement plan agents. These individuals will have valid PTINS from 2016. The database also has a record of completion for Annual Filing Season Program participants and PTIN holders.